Thank you for the opportunity to provide comment on the Commission Guidance Regarding Client Commission Practices under Section 28e. File No. S7-09-05

As an independent research provider, I am pleased that the Commission issued this guidance to help clarify the situation with the use of soft dollars to pay for research services. I agree with the substance of the Guidance in terms of the definition of research services and the appropriate use of soft dollars.

I disagree, however, with the Commissions comments with regard to Commission Sharing arrangements. I believe that the ability to enter into Commission Sharing arrangements helps to level the playing field with regard to independent research relative to services from a full-service broker. Given that the Commission has decided not to insist on total unbundling of research, nothing should stand in the way of a broker-dealer who has excellent research capabilities joining forces with another broker-dealer who has execution and trading ability. These two entities working together can present themselves to a fund manager as a true alternative to a full-service broker who provides these research and brokerage services together.

While I agree that an introducing broker should have to share in some of the financial responsibility for a trade and that payment can be delayed until payment or securities have been received, I believe the record-keeping and monitoring requirements are inappropriate.

You are certainly not asking that the research department of a full-service broker keep watch over the activities of the trading department. You are not requiring that the research department of Salomon Smith Barney or Morgan Stanley keep tabs on the trades being used to compensate them for the research being provided. It should be no different for a broker-dealer working with another broker-dealer to offer a bundled service.

Of course, both the broker-dealers have to comply with the numerous requirements for NASD registration and pass the various audits. Those regulations are sufficient to ensure that the broker-dealer is being properly run and administered.

Clearly soft dollar payments are intended to allow fund mangers to compensate providers for appropriate research services which help their investment process. However, the long delays in getting appropriate clarity on this issue from the Commission and widespread perception that there is something wrong with soft dollars and the fact that some fund management companies have decided in recent years to avoid soft dollars completely remind us that as many payment avenues as possible should be open to allow fund managers to access independent research. I also note some recent press reports that some fund management companies are institution caps or limits to the amount of soft dollars being paid. In addition to clear rules on the use of soft dollars, commission-sharing should be made easier, not harder.

If the Commission chooses to not require full unbundling, the investing community and the financial markets as a whole are best served by making it easier, not harder, for independent research providers to team with execution brokers to provide a service equal to the full-service broker.

Please feel free to contact me at the email address provided to discuss these topics in more detail.